A blog on recent and topical developments in corporate transactions law by Jim Rench, corporate partner with Stark & Knoll in Akron, Ohio.

Friday, December 07, 2007

Congress Moves Toward Agreement on Blocking U.S. Minimum Tax

Dec. 7 (Bloomberg) -- Congress moved closer to protecting 23 million households from the alternative minimum tax as Senate Democrats dropped a demand to link it to a tax increase on executives at private equity firms and hedge funds.The Senate approved a one-year, stop-gap measure that temporarily indexes the minimum tax for inflation, sparing 23 million American households from an average tax increase of $2,000 this year.The 88-5 vote puts pressure on the House to abandon its own legislation that links the minimum tax relief, aimed at middle- class families, to higher taxes on executives of hedge funds, buyout firms, as well as real estate and other partnerships.Senate Majority Leader Harry Reid said House Democrats would accept the Senate action. Minutes later, House Ways and Means Chairman Charles Rangel, a New York Democrat, issued a statement saying he would try to alter the Senate measure to close a tax loophole that allows hedge fund managers to defer taxes on money in offshore accounts.``The House will consider these amendments so that we may give the Senate another chance to do the right thing and pass responsible AMT relief,'' Rangel said.Rangel earlier yesterday said he wouldn't oppose removing a provision that would boost the tax on so-called carried interest, the performance fees that managers of private equity firms, hedge funds and some real estate and oil and gas partnerships earn.

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Jim Rench is a Partner in the law firm of Stark & Knoll Co., L.P.A., Akron, Ohio, where he is a member of the Corporate Practice Group.Mr. Rench received his undergraduate degree (B.S. in Business Administration - Accounting and Finance) from Miami University, Oxford, Ohio, and his law degree, (J.D., magna cum laude, Order of the Coif) from The Ohio State University, College of Law.Mr. Rench has enjoyed a Martindale-Hubbell rating of “av” for many years and has been recognized in Best Lawyers in America (Banking Law) since 1995 and in Ohio Super Lawyers (Business, General) since 2004 . He is a member of numerous Bar and professional associations, including the National Association of Corporate Directors and the Association for Corporate Growth.Mr. Rench has substantial experience representing clients in corporate and commercial matters, including entity formation and governance, securities and corporate finance, secured lending, and mergers and acquisitions.